The National Association for Variable Annuities (NAVA) announced today second quarter results for the variable annuity industry.  The combined net assets of U.S. variable annuities increased 1.7 percent to $1.05 trillion at the end of the second quarter, as compared to the end of the first quarter of 2004.  Net assets increased by 18.1 percent relative to the second quarter a year ago.

Table 1. Variable Annuity Net Assets

(Dollars in Millions)                      6/30/04            3/31/04          12/31/03            6/30/03

Total Net Assets                         1,047,148       1,029,484        1,000,025           886,308

^{Source: NAVA and Finetre/VARDS}

Total variable annuity premium flow, or total sales, for the second quarter was $33.4 billion, a 1.5 percent increase from second quarter 2003.  Second quarter net flows of $12.5 billion show an increase of 4.6 percent from the second quarter 2003 net flows of $12.0 billion.  The mix in premiums for the second quarter showed 60.1 percent of the total premium flow was in qualified plans and 39.9 percent in non-qualified. 

Net Flows for the first six months of 2004 were $22.2 billion, or 32.6 percent of total flows. This reflects a 13.5 percent increase in net flows as compared with the first six months of last year.

Table 2. Variable Annuity Premium Flows¹

                                                   Quarter Ended                     Six Months Ended

(Dollars in Millions)                6/30/04            6/30/03            6/30/04            6/30/03

Total Sales                               33,381             32,893             68,118             61,997

Net Flows                                 12,544             11,987             22,207             19,562

^{Source: NAVA and Finetre/VARDS}

Table 3. Quarterly Variable Annuity Total Premium & Net Flows

                                                                Quarter Ended

($ Millions)             6/30/04         3/31/04         12/31/03         9/30/03           6/30/03

Total Sales              $33,381         $34,737          $31,778         $31,874        $32,893

Net Flows                 12,544            9,663              13,263          13,158          11,987

Net Flows as %          37.6%            27.8%             41.7%           41.3%          36.4%
of total sales

^{Source: NAVA and Finetre/VARDS}

The mix of net assets by investment objective showed that $572.8 billion, or 54.7 percent of assets, was held in equity accounts.  This is an increase of 18.6 percent as compared with mid-year 2003 when $483.0 billion, or 54.5 percent, was held in equity accounts.  The mix also shows that $269.1 billion, or 25.7 percent of assets, was held in fixed accounts, which is an increase of 20.5 percent as compared to mid-year 2003.

Table 4. Variable Annuity Assets by Investment Objective

(As a percent of total assets)            6/30/04                  6/30/03           

Equity                                               54.7%                    54.5%

Fixed Accounts                                    25.7                       25.2

Balanced                                              8.6                         8.4

Bonds                                                  8.3                         7.3

Money Market                                      2.7                         4.6

^{Source: NAVA and Finetre/VARDS}

NAVA is a non-profit trade association located in suburban Washington D.C.  NAVA provides a variety of services to the industry including educational forums, research, and conferences aimed at furthering the development and understanding of fixed and variable annuities, income annuities and variable life insurance.  NAVA also maintains and supports an educational website for consumers at www.RetireOnYourTerms.com. 

1 - Total Premium Flows represent the sum of new sales [all first-time buyers of a contract, including inter- and intra-company exchanges] and additional premiums from existing contract owners.  Net Flows represent Total Premium Flows minus surrenders, withdrawals, inter- and intra-company exchanges, and benefit payments.